Section 41 of the Transfer of Property Act elaborates the concept of ostensible owner with a view to protect homebuyers in India.
What does Section 41 of Transfer of Property say?
According to this section, a property purchase can’t be declared void in case an ostensible owner has made the sale and the buyer had reason to believe that the actual ownership of the property belonged to the said ostensible owner. However, the section lays down certain rules to keep safe the legal integrity of such transactions.
- The seller should be an ostensible owner.
- The seller (ostensible owner) has proof to show he had the consent of the real owner, for the transaction, in the implied, or expressed form.
- The ostensible owner should get some money in exchange.
- Due diligence was applied by the buyer to ensure the seller was selling the property in good faith.
See also: Is property sale through power of attorney legal?
Who is an ostensible owner?
According to Section 41, a person will be considered as an ostensible owner of a property if he has enough proof to show that he has been given approval by the real owner to take property-related decisions on his behalf. In other words, an ostensible owner is not the actual owner of the property, but he can represent on behalf of the real owner for property-related transactions.
For instance, if a non-resident India gives his property in the country to one of his close relatives for care and maintenance, and the relative ends up selling this property, they would be considered the ostensible owner of the property. Whether this transaction is legal will be determined based on the conditions mentioned above.
Who has the burden of proof in such cases?
If a dispute was to be set aside in such a transaction, it will be the responsibility of the buyer to prove that the seller indeed was the ostensible owner and that he had the consent from the real owner to sell the property. He should also have to prove that he applied due diligence to find out about the ostensible owner’s rights, and that he paid the ostensible seller for the transaction. His case can also be made stronger if the buyer is able to prove that the ostensible owner kept the facts hidden from him and made the sale by duping him.
In case, the buyer fails to prove all these points, the sale will be declared void and he will end up losing his newly acquired property.
FAQs
What does Section 41 of the Transfer of Property Act say?
Who is an ostensible owner?
An ostensible owner is the one who seems to be, or the stated owner when this is perhaps not the case.
What is the meaning of nemo dat quod non habet?
Is Section 41 of the Transfer of Property Act applicable in case of movable property?
No, Section 41 is applicable only to transfer immovable property and not the movable property.
What is the purpose of Section 41 of the Transfer of Property Act?
The main purpose of Section 41 of the Transfer of Property Act is to safeguard innocent buyers who purchase a property from an ostensible owner. This safety is offered when the real owner fails to protect the transfer.
What is an implied consent?
Implied consent means that the conduct of the real owner approves the conduct of the ostensible owner.
Does the consent of minors valid for an ostensible owner to sell property?
No, even if an ostensible owner claims to have the consent of a minor, it will be invalid as minors do not have capacity to give the required consent.
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